Former investment banker and personal finance expert Nischa Shah revealed on her YouTube channel that recently, a clever acquaintance of hers almost fell victim to scammers. She couldn’t help but lament that scams nowadays have become highly sophisticated and deceptive, sending shivers down people’s spines.
According to Nischa, scammers no longer need to hack into your bank account to get your money. Instead, they simply need to hack into your mind and trap you using psychology.
Nischa’s female friend, who lives in the UK, received a text message from Barclays Bank one day, asking her to confirm several transactions on her debit card. Having received similar messages from banks in the past, she didn’t think much of it.
She checked the transaction records – £6 spent here, £9 spent there, and a £2 subscription fee. However, she didn’t make these payments, so she replied to the message saying they weren’t hers. Subsequently, Barclays Bank messaged her that her card had been frozen and advised her to call the bank to explain the situation in detail and understand the next steps.
As she was about to grab pen and paper to take notes, the phone rang. The caller sounded friendly, claiming to be a member of Barclays Bank’s security team. They informed her that they would handle the small transactions, but there was one transaction that greatly concerned them. It was a £13,000 expense at Nobu restaurant, which caused Nischa’s friend to panic.
The scammers then painted a dire picture, expressing concern that her identity had been stolen, and criminals might invade her other banking applications or even apply for loans in her name.
Nischa’s friend was extremely worried at this point and wanted to protect herself at all costs. The scammers continued to reassure her, claiming they would never ask for her bank password or one-time verification code. They mentioned involving the Financial Conduct Authority (FCA), the UK’s financial services regulator.
Subsequently, Nischa’s friend received a WhatsApp call from someone claiming to be from the FCA, who guided her through a series of steps over the phone until a notification popped up, requesting her to share her screen. In that moment, she suddenly realized something was amiss and promptly hung up the phone.
Fortunately, Nischa’s friend saw through the scam in time and didn’t suffer any financial loss. However, what shocked Nischa was that at every step of the scam, everything seemed perfectly legitimate. The scammers were adept at using psychology to control the victims’ actions.
Nischa analyzed some of the scammers’ tactics to help everyone detect scams and protect themselves.
It’s well-known that stress can affect people’s ability to make wise decisions. When we have time to pause, think, and weigh various options, we are more likely to question if something is valid. Therefore, scammers try to deprive you of this thinking time.
They may tell you that your account has been compromised and immediate action is required to prevent something bad from happening. Their goal is to prevent you from making calm, rational decisions and instead prompt you to rush for a solution.
If Nischa’s friend had hung up the phone and called Barclays Bank herself at that moment, the entire scam could have been exposed.
Nischa said, “When such scams occur, it’s challenging to stay clear-headed. So whenever someone creates urgency in money-related matters, consider this urgency itself as the first major warning signal. The more they push you to act immediately, the more you should slow down.”
We often trust those perceived as legitimate authorities, a bias psychologists call “authority bias,” meaning we are more inclined to trust opinions or instructions from people in positions of authority.
Scammers exploit this fact adeptly, which is why they often impersonate banks, tax authorities, customs, police, and other authoritative institutions.
The person trying to deceive Nischa’s friend claimed to be from Barclays Bank, spoke with confidence and authority, assured her that the bank would never ask for her password or a one-time verification code, and even involved the Financial Conduct Authority.
Therefore, don’t solely rely on someone sounding professional or appearing to be from a trusted institution to determine their legitimacy.
Just as fear distorts judgment, greed does the same. Scammers capitalize on this psychological aspect, using promises of investment returns, exclusive opportunities, or seemingly skyrocketing investment projects as bait. They often combine potential returns with scarcity.
In psychology, there’s a concept called “scarcity effect,” where people desire something more when it appears rare or difficult to obtain.
Scammers may tell you that you must invest today as slots are running out, or prices are about to soar. This emotional manipulation, different from the fear Nischa’s friend experienced, aims for the same result.
They want you to act before fully understanding or considering the situation. Therefore, take time to investigate and consult others. Missing out on an investment opportunity is far better than falling for a scam.
Scammers know that the easiest people to manipulate are those they isolate. When you feel scared, excited, or under pressure, it’s challenging to see the irrationality of the situation, making it easier for onlookers to spot the scam.
If there were others around Nischa’s friend at that time, they might have immediately advised, “Hang up the phone and call the bank yourself.”
This is why scammers often try to keep you focused and prevent you from talking to others. They may tell you it’s a confidential situation, ask you not to explain the transfer to the bank, or keep you on the call, guiding you through each step while ensuring you have no time to hang up, generating doubts.
Therefore, if someone contacts you out of the blue regarding money matters, involve others, step away from the call temporarily, explain the situation to someone you trust, and seek their opinion.
If the person on the phone tells you not to disclose the situation to anyone, that’s a major warning signal in itself. Legitimate banks, investment firms, or government agencies, when providing assistance, would never ask you to cease contact with trusted individuals.
Nischa concludes that a habit effective against such scams is independently verifying all information. Don’t click on any links, dial the provided phone numbers, respond to emails or messages – independently verify and search for all information.
If an authoritative body contacts you, check the contact details on their official website and call them yourself. If your child calls saying they lost their phone, visit their place or ask them about something only the two of you would know to confirm their identity.
Once again, remember: don’t click, don’t reply, independently verify all information.